Legal Article - Business Law

Motor Retail Advertising

Advertising comes in many forms:

• Press local/national

• TV/radio

• Hoardings

• Buses

• Showroom signs

• Mailshots

And there will be more.

If you give any indication that you will be providing finance/credit or hire (for regulated agreements) then the requirements of the Regulations for credit/hire advertising will take effect.

The Regulations are by no means straightforward and you would do well to Contact Lawgistics if you are at all unsure. 

 Advertisements can be complicated by advertising two or more credit deals, with certain information from one deal mixed with information from another.

It is a fundamental requirement that all credit/hire advertisements are not false or misleading. Some advertisements are not caught by the Regulations but are still caught by this requirement.

It is the equivalent of the Trade Descriptions Act but for credit advertisements. Theoretically a consumer credit advertisement could comply with the Regulations but still be false or misleading.

As an example if the amount of credit was more prominent than the cash price thereby giving the impression of lower prices then this could be misleading.

A ‘mixed’ deal could also be misleading.

As indicated above some advertisements are not caught by the Regulations. The most common exemptions are:

• The credit/hire is advertised for business purposes only. It is not unusual to advertise in this way. The Regulations would apply if the credit was available to both businesses and individuals, and therefore it should be made clear in the advertisement that it is directed to business users only.

The same applies to credit available for companies.

• In the case of hire which would always exceed £25,000 (either unsecured or not secured on car).

• In the case of hire which will not last for more than 3 months or will cost more than £25,000.

Obviously for most retailing situations the Regulations will apply. There are 3 ‘levels’ of credit/hire advertisements depending on how much information is to be included called Simple, Intermediate and Full.

Published: 16 Mar 2011

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